Correlation Between Cullen International and Cullen High
Can any of the company-specific risk be diversified away by investing in both Cullen International and Cullen High at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Cullen International and Cullen High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cullen International High and Cullen High Dividend, you can compare the effects of market volatilities on Cullen International and Cullen High and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Cullen International with a short position of Cullen High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cullen International and Cullen High.
Diversification Opportunities for Cullen International and Cullen High
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cullen and Cullen is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Cullen International High and Cullen High Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cullen High Dividend and Cullen International is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Cullen International High are associated (or correlated) with Cullen High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cullen High Dividend has no effect on the direction of Cullen International i.e., Cullen International and Cullen High go up and down completely randomly.
Pair Corralation between Cullen International and Cullen High
Assuming the 90 days horizon Cullen International High is expected to under-perform the Cullen High. In addition to that, Cullen International is 1.19 times more volatile than Cullen High Dividend. It trades about -0.11 of its total potential returns per unit of risk. Cullen High Dividend is currently generating about 0.07 per unit of volatility. If you would invest 1,472 in Cullen High Dividend on August 30, 2024 and sell it today you would earn a total of 12.00 from holding Cullen High Dividend or generate 0.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cullen International High vs. Cullen High Dividend
Performance |
| Timeline |
| Cullen International High |
| Cullen High Dividend |
Cullen International and Cullen High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cullen International and Cullen High
The main advantage of trading using opposite Cullen International and Cullen High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cullen International position performs unexpectedly, Cullen High can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Cullen High will offset losses from the drop in Cullen High's long position.The idea behind Cullen International High and Cullen High Dividend pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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